Westpac’s standard variable home loan rate for owner occupiers with principal and interest repayments will rise to 5.38%, just two basis points ahead of the ANZ.

Fred Ohlsson, ANZ Group Executive Australia, says the decision to lift was a difficult one.

“We know the impact rising interest rates have on family budgets,” he says.

“The reality is it is more expensive for us to fund our home loans on wholesale markets and we also needed to balance the needs of all stakeholders.

“There is no change to the effective rates of our home loan customers in drought declared regional Australia benefiting more than 70,000 of our customers.

“We wanted to play our part in keeping cash in regional towns impacted by the drought and we hope this will also assist both families and small businesses in these areas.”

The new ANZ rates:

Source: ANZ

The bank says those concerned by rising interest rates can lock in one of ANZ’s fixed rates.

ANZ’s two-year fixed home loan rate for owner-occupier Breakfree customers is currently 3.75%.

CBA

Angus Sullivan, Group Executive Retail Banking Services at the Commonwealth, says the decision was made after careful consideration.

“We are very conscious of the impact that increasing interest rates will have on our customers, however it is important that we price our home loan products in a way that reflects underlying costs,” he says.

“Over the past six months, we have seen funding costs increase significantly, driven primarily by a rise in the 90 day Bank Bill Swap Rate. These changes have increased the cost of providing loans to our customers.

“We have absorbed these higher funding costs over the past six months in the hope that they would ease. Unfortunately, the costs have remained high and it is now expected that they will remain elevated for the foreseeable future.”

CBA says it deliberately delayed implementation of the new rates by four weeks to give customers time to review their circumstances.